- Saved Articles
Copyright © HT Media Limited All rights reserved.
Ford's India exit: What went wrong and who would benefit from it
- Ford always focused on bringing global cars to India, while other brands focused on India-specific models.
- Ford was a late entrant in the small car segment of the Indian market that remained dominant in the country for a long time.
Ford became the latest automobile brand in India to call quit. The US-based auto major has announced that it will quit local manufacturing and only sell high-end models in India through the import route. This came as a shocker and created quite some ripples.
Also Read: Ford EcoSport is set to exit this market too after India
It is clear that the American presence in the Indian car industry is only limited to Jeep that has a minuscule market share here. A host of factors have played crucial roles in Ford's exit from India, claim experts. They also say Ford's absence will help the rival automakers in India who are present in the utility vehicle segment.
Also check these Cars
Also Read: Ford's decision to stop manufacturing doesn't reflect on Indian biz environment
What went wrong?
According to industry experts, Ford didn't read the Indian market properly. The carmaker didn't customise the car platforms and the product strategy too was not correct.
For a quite long time, small cars have ruled the Indian market. While Maruti Suzuki and Hyundai aced the market by focusing on small cars, Ford or General Motors failed to do so. None of these car brands had small cars in their global portfolio. They didn't customise their India product strategy according to the local market preference as well.
Also Read: After Ford shuts India shop, FADA wants Centre to pass law to protect dealers
Ford tried to look at the Indian market through the US prism. While the country was obsessed with the mileage of vehicles, Ford focused on engine power and performance. The other car brands, on the other hand, especially Maruti Suzuki , Hyundai, Tata Motors served the right ingredients to the consumers.
While other foreign automakers first draw out a product plan for India, then it becomes part of the Asia Pacific product strategy and then the global plan, Ford tried another way round. It viewed the Indian market from a global level.
Lack of varieties in models is another reason that resulted in the brand's lacklustre performance. While other car brands continued to introduce new models, Ford focused on Ikon for a long time. It later brought models like Figo , Fusion, Aspire , EcoSport , Endeavour and Freestyle . But it was late already and Ford was lagging behind in the race.
In FY2000, Ford sold 8,000 PVs in India, which increased to 93,000 units in FY2019. However, market share growth for the brand was negligible from 1.1% in FY2000 to 2.8% in FY2019. In FY2020 and FY2021, the automaker sold around 66,000 and 48,000 units respectively. Clearly, the number of vehicles sold in India by Ford increased over the last two decades. But that didn't help much in terms of capturing market share.
As the brand claims, its accumulated operating losses over the 10 years was more than $2 billion. Besides this, a $0.8 billion non-operating write-down of assets in 2019 too resulted in its decision to shut down the two Indian plants.
Who will benefit?
Ford India has never been a major player in any segment of the Indian market. Hence, its absence will hardly result in any substantial windfall for the other car brands in the market. However, Ford offers two popular models in the utility vehicle segment - EcoSport and Endeavour.
Nearly half of the cars Ford sold in India were utility vehicles. During FY2015, Ford's share in the UV segment peaked at 9.5% but dropped in successive years. In FY21, the company had a 3.3% market share in the UV segment. With Ford's exit, other car brands will try to grab that part with their offering in the UV segment.
Maruti Suzuki, Hyundai and Tata Motors have been keenly focusing on the UV segment for the last couple of years and tasted success as well. Maruti Suzuki has seen its market share in the UV segment grew from 12.4% in FY2015 to 21.6% in FY2021. Hyundai's market share grew from 0.3% in FY2015 to 20.2% in FY2021. Kia too has a good chance to grab this vacuum with its popular models such as Seltos and Sonet .
(With inputs from IANS)
Similar Stories
Editor's pick.
Trending this Week
Latest Car & Bike News
Check Latest Offers
Please provide your details to get personalized offers, want to get the best price for your existing car.
Want to get the best insurance for your existing vehicle?
Please verify your mobile number.
- India Today
- Business Today
- Harper's Bazaar
- Brides Today
- Cosmopolitan
- India Today Hindi
- Reader’s Digest
- Aaj Tak Campus
Download App
Get 37% off on an annual Print +Digital subscription of India Today Magazine
What the exit of ford motor company from india tells us, the third multinational to leave india in as many years, ford had been struggling on the sales front, while a much-touted joint venture with mahindra failed to take off.
Listen to Story
However, after just 25 years of operations—not too long for an auto manufacturer—Ford has decided to exit India. (Its rival, Japan’s Toyota has been in India since 1997, while Czech auto maker Skoda entered India in 2001.) Not that those years saw a smooth ride for the maker of iconic cars like the Model T, the Thunderbird and the Mustang. While it found big success in models such as the Ikon, the Endeavour and the EcoSport, others like the Mondeo and Fusion did not do as well as expected. The company had posted operating losses of over $2 billion (Rs 14,600 crore) and demand for its vehicles was weak. It could not find a sustainable path forward to long-term profitability, according to Ford India head Anurag Mehrotra. Calling off a joint venture (JV) it had entered with Mahindra & Mahindra in 2019 citing the Covid pandemic made matters worse for Ford. The JV was aimed at developing, marketing and distributing Ford vehicles in India and some Ford and Mahindra products in the high-growth international markets. With that JV off the cards, Ford’s chances of survival in the Indian market grew bleaker.
Ford will shut down its Sanand (Gujarat) plant by the fourth quarter of 2021 and end vehicle manufacturing and engineering at its Chennai plant by 2022. However, it will continue to sell cars in India through imports, and media reports say this will see the import of some high-end models such as the Mustang Mach-e, the Mustang and the Ranger. Ford will also provide continuing support to dealers to serve existing customers. Around 4,000 of its staff will be impacted by the decision.
The string of exits of big MNC firms from India does not augur well for the country, which has been seeing high unemployment numbers during the pandemic. General Motors’ exit in 2019 was driven by a decision to get out of non-profitable operations in a few regions including India, Russia and Western Europe. Harley Davidson left India as part of its ‘Rewire’ strategy to focus on select markets such as North America, Europe and some parts of Asia. The company had a loss of $96 million during the April-June 2020 period. This may not be a big loss in itself, but clearly, it did not seem to indicate good demand in the near future. The pandemic has only made matters worse for auto companies as they were forced to keep their retail outlets shut during the lockdown period.
The world over, auto companies are conducting big revamp exercises as the pandemic takes its toll on their revenues. They also need to invest heavily in new businesses like electric vehicles, which is where the future of the auto sector lies. According to the Paris-based International Energy Agency, after a decade of rapid growth, the number of electric cars globally hit the 10 million mark in 2020, a 43 per cent increase over 2019. Battery electric vehicles accounted for two-thirds of the new electric car registrations in 2020. China, with 4.5 million electric cars, has the largest fleet, though in 2020 Europe had the largest annual increase, reaching 3.2 million.
The Indian market is especially tough for these MNCs due to the dominance of the Japanese and Korean car makers. Maruti Suzuki has a roughly 48 per cent share in the Indian market, while Hyundai India has around 17 per cent. At the same time, demand has been muted. Auto sales have registered a combined annual growth rate of just 1.5 per cent in India over the past five years, upsetting the plans of MNCs who have heavily invested in the Indian markets. The government has announced a scrappage policy where it is mandatory to get one’s car inspected when its registration certificate expires. As per law, a registration certificate for a passenger vehicle is valid for 15 years from the date of issue. But there is no clarity whether this will have any significant impact on the sales of automobiles. In August this year, wholesale auto sales fell 12 per cent year-on-year, which the industry attributed to an ongoing shortage of semiconductors that has impacted output, and the high commodity prices that have increased vehicle costs. Add to this the rising cost of fuel in the past few months, and vehicle demand is expected to remain under pressure, forcing companies to rework their strategies in a ‘cost-conscious’ market like India.
We use cookies to ensure best experience for you
We use cookies and other tracking technologies to improve your browsing experience on our site, show personalize content and targeted ads, analyze site traffic, and understand where our audience is coming from. You can also read our privacy policy , We use cookies to ensure the best experience for you on our website.
- Leaders Speak
- Brand Solutions
- What went wrong with Ford in India and who will benefit from its exit?
- Updated On Sep 11, 2021 at 09:21 PM IST
Different factors at different points of time played against Ford India and affected the company cumulatively. The three factors - product, pricing and positioning -- were improved over the years. With Ford facing trouble globally it has to cut down its losses Industry expert
.. In FY2000, Ford sold 8,000 PVs in India, which grew to 93,000 units in FY2019. But market share growth was negligible from 1.1 per cent in FY2000 to 2.8 per cent in FY2019 Vahishta Unwalla, Lead Analyst, Care Ratings Ltd
The investment was logical as per the plans that the company had at that point of time. But it didn't work out later Ford India official
Ford's decision to stop manufacturing in no way reflects on business environment in India: Government source
Earlier on Thursday, Ford announced the closure of its local manufacturing in India affecting more than 4,000 employees. Ford Motor Co is globally shelling out additional 1.7 billion dollars in cash to restructure its operations.
Ford India to shut down both vehicle manufacturing factories; Sanand engine factory to continue
The top management told employees that it would rapidly "ramp down" production of its popular models made in India, such as Ford Figo, Ford Freestyle in India.
- Published On Sep 11, 2021 at 09:15 PM IST
All Comments
By commenting, you agree to the Prohibited Content Policy
Find this Comment Offensive?
- Foul Language
- Inciting hatred against a certain community
- Out of Context / Spam
Join the community of 2M+ industry professionals
Subscribe to our newsletter to get latest insights & analysis., download etauto app.
- Get Realtime updates
- Save your favourite articles
- Ford India exit
- general motors
- ford car manufacturing
- ford motor co
- ford dealers
- maruti suzuki
- hyundai motor
- The Inventory
What automakers need for success in India’s huge passenger car market
India’s passenger car market is predictably huge—and worth around $30 billion—but it’s a tough nut to crack.
US auto giant Ford is the latest major company to run into difficulties. On Sept. 9, it announced it will completely shut down manufacturing operations in India , after 20 years of unsuccessful operations. In the financial year that ended on March 31, 2019, Ford sold just 93,000 units, capturing a mere 2.75% of the market . In comparison, the country’s largest car manufacturer Maruti Suzuki, has over 50% of the market, which saw 2.7 million personal vehicles sold in the financial year ending in March.
Ford’s exit comes after General Motors abandoned its efforts in India . Meanwhile Japan’s Toyota has said it won’t expand its investments in the country.
Automotive industry analysts explained what Ford got wrong in India, and what it takes for foreign car companies to beat the competition in India’s growing car market.
What do cars cost in India?
Car buyers in India are particularly price sensitive, experts say, which means the cheapest compact cars do best. Those tend to come from Asian car makers, rather than US ones.
Vahishta Unwalla, lead analyst at Mumbai -based credit rating agency Care Ratings, says most Indians have limited disposable income, and so can’t afford a discretionary item like a passenger vehicle, which is mostly priced over 5 lakh rupees ($6,800). For that reason, only about 15% of the total automobiles sold in India every year are passenger vehicles, she said, while most sales are of scooters or motorbikes.
“For any car maker to be successful in India,” Unwalla said, “it is crucial that their product price points are on the lower side, running cost is low, the distribution network should be wide and extensive, and the after-sale services should be satisfactory.”
The cheapest passenger car Maruti offers in India has a starting price of Rs3.15 lakh ($4,275) while Ford’s equivalent costs more than Rs5 lakh.
Where did Ford go wrong in India?
Rajeev Chaba, president and managing director of MG Motor India and a former executive of General Motors, agrees with Unwalla. In an interview with Quartz in May, he explained why most big global companies are either sitting out or struggling to survive in India.
“In India, very few players have been successful but those who have succeeded are making good money,” he said. “The name of the game in India is what I call an R-to-R model…You look at the whole value chain from raw material to resale, and then at every stage, you have to see how you can economize.”
Companies like Maruti—initially set up by the Indian government but now controlled by Japan’s Suzuki Motor—use local partnerships to make maximum use of the country’s existing supply chain to offer affordable products. But companies like GM and Ford have struggled to get a handle on the way India works.
In 2019, Ford announced an alliance with another Indian automaker, Mahindra & Mahindra , aiming to cut costs for developing and producing vehicles. However in 2020, the partnership collapsed and Ford decided to go solo in emerging markets, including India.
The gamble to go solo clearly did not play out well for Ford.
“The company’s individual operation was losing ground to hefty losses, asset write-offs, and a decline in sales volume for the past few years,” explained Bakar Sadik Agwan, senior automotive consulting analyst at GlobalData. “Partnership and collaboration would have been the last resort for Ford to continue its operations smoothly.”
Why are Maruti and Hyundai so successful in India?
Companies like Maruti and Hyundai Motor are focused on launching new models , or variants of their existing cars at regular intervals, while Ford had long gaps between new launches, to its disadvantage. For example, by the end of 2022 Maruti and Hyundai are planning to launch eight and nine models, respectively. On the other hand, Ford has a total of just three cars planned in the same time period.
After Maruti, Hyundai has the second-largest share of the Indian car market and is another example of a foreign auto maker that managed to crack India with its strategy of offering more features than Maruti at a slightly higher cost. Already India’s biggest car exporter, last year it reached a milestone of exporting 3 million cars from the country.
Ford also failed at widening its network of service centers in India, with smooth after-sales service a key consideration for many Indian buyers when picking a car.
Maruti currently has over 3,500 service stations across Indian cities, while Hyundai has more than 1,300 in the country.
In fact, within two years of its entry into India, South Korean firm Kia managed to drum up at least 125 in all of India’s metros . However, even after two decades, Ford reportedly only has 308 service centers.
What will Ford’s failure cost India?
At present, Ford is working to downsize its manufacturing capacity, and will eventually shut it down. The company plans to first end production at its Sanand plant by the end of 2021, followed by the Chennai plant by the middle of 2022. It will continue to sell its niche products—Mustang and Endeavour.
However, its decision to exit has cast a shadow of uncertainty over the future of its employees and dealers within the country. The company employs 4,000 people in India, but more will be affected.
“Ford is expected to have nearly 170 dealers who in turn have around 390 outlets and have invested Rs 2,000 Cr for setting up their dealerships,” said Vinkesh Gulati, president of the Federation of Automobile Dealers Associations (FADA), an autonomous body for car dealers in India. “These dealers alone employ 40,000 individuals.”
📬 Sign up for the Daily Brief
Our free, fast, and fun briefing on the global economy, delivered every weekday morning.
- PASSENGER VEHICLES
- AUTO COMPONENTS
- COMMERCIAL VEHICLES
- THREE WHEELERS
- TWO WHEELERS
- AUTO TECHNOLOGY
- BUDGET 2024
- NATIONAL NEWS
- INTERNATIONAL NEWS
- SALES ANALYSIS
- INDUSTRY REPORTS
- Analysis Report
Analysis: Why Ford called it quits in India
Another one bites the dust with Ford announcing its intent to stop manufacturing in India. It joins General Motors which had taken this decision earlier. Are policies to blame or are some companies just not up to it coping with the challenges of the Indian market? Murali Gopalan dwells upon this issue.
Despite being in India for 25 years, Ford, which manufactured five models locally, has a meagre 1.7 percent PV market share. The EcoSport is its best-selling model and India’s most exported model.
Ford set up its vehicle assembly and engine plant at Sanand in Gujarat in 2015
On March 22, 2018, Ford and Mahindra signed MoUs to co-develop midsize and compact SUVs, electric vehicle and connected car solutions. In less than two years, M&M pulled out of the plan.
Grossly underutilised 440,000 units capacity at its two plants. In FY2021, Ford India produced only 88,805 units – that’s barely 20 percent – and sold 48,042 in the domestic market.
With Ford India unable to come to grips in terms of steering its future growth in India, the only option was to cut its accumulated losses of $2 billion over 10 years.
At one level, the news was not exactly unexpected. For some weeks now, speculation was rife that it would only be a matter of time before Ford brought down the curtain down on its India story — one in which it had little to show despite being around for 25 years.
Since the time the American carmaker along with Mahindra & Mahindra jointly dropped a bombshell on the eve of the new year 2021 to announce that they would no longer be pursuing their alliance, the die had been cast. The two companies had in October 2019 made it known that they were teaming up for a host of initiatives including joint product development, electrification, exploring new markets and so on.
This was some months before Covid-19 was scheduled to make its lethal presence felt worldwide and by the time it had scorched the global landscape, companies across the world were gasping for breath. Businesses had been ravaged and it was now time to set the house in order again.
A new leadership team at M&M was of the view that it was time to cut back on needless spends which were yielding little in return. SsangYong was one such: it was a buyout that was proving to be a huge strain on the Indian SUV maker. The other casualty was the JV with Ford.
The latter was thinking on the same lines too. It now had to tighten its belt and realised that there was just no point throwing money all over the place especially in the aftermath of the pandemic. Additionally, there were new global challenges to reckon with like electric mobility which needed huge investments. Ford had tied up with Volkswagen to take this story forward and in the case of India, it was impossible to go it alone without M&M.
Within days of the duo making this dramatic announcement, Ford decided to shut down its manufacturing operations in Brazil simply because it was not financially viable. India was clearly next on the line even while the local management pulled out all the stops to find solutions like new partners in the manufacturing operations. When all avenues had dried up, it was only a matter of time before Dearborn would call it a day in India.
Chennai, Sanand workforce stare at uncertain future To that extent, even while the news was not a complete surprise, it still left a whole lot of stakeholders shellshocked. Nearly 4,000 employees at the Chennai and Sanand (Gujarat) plants are now staring at an uncertain future even while they are bound to get a relatively large lump sum amount as their severance package. This is not likely to satiate their larger requirements of a permanent job which in today’s times is a tall order.
This is similar to the situation at General Motors’ workforce at the Talegaon plant near Pune which is still holding its ground and refusing to accept the package offered to them. Complications could arise at Ford too — workers are not going to be content with what they get as a golden handshake and protests are inevitable.
This will be more pronounced at the Chennai plant which has a lion’s share of the manpower and it remains to be seen if the Tamil Nadu government will step into the picture. None of this will have a bearing on Ford’s decision and, as is the case with business closures, it will leave behind a trail of anger and sorrow.
Statistics will also show that the list of exits in the automotive space is growing in India. It began 24 years ago with Peugeot which is now back in its new avatar as Citroen, followed by Daewoo and then, more recently, GM. In the heavy commercial space, MAN Trucks shut down its India operations while Harley-Davidson was the big ticket exit in two-wheelers (even while it is now attempting a comeback of sorts by way of a lifeline from Hero MotoCorp).
This kind of news can be interpreted in two ways: one that it is bad publicity for India which is perceived as one of the most promising automotive markets in the world. If big brands like GM and Ford cannot survive here, a section of industry experts will rightly argue that the country has not given them the breaks they needed.
After all, little has been done to address issues on heavy tax levies like the GST which should ideally be reduced from the present level of 28 percent to 18 percent. The other issue, experts will add, pertains to ad hoc policies like jumping directly from Bharat Stage IV to VI within a three-year timeframe without any thought on what this means to automakers.
There are a host of other problems to be reckoned with like the absence of a template for electrification where the goalpost has constantly been shifting. After all, it was not too long ago when NITI Aayog told top two-wheeler makers that they would have to junk their internal combustion engine motorcycles of under 150cc by 2025 and embrace electric. The idea was fortunately scrapped but the fact that a section of policymakers could even think of something so drastic worried the auto industry.
Hyundai-Kia a hit while American OEMs quit While each of these arguments is absolutely valid, there is a section of observers who will then point out that companies like Hyundai are not complaining. After all, the Korean brand has been around as long as Ford and is a formidable force to reckon with in the market. Hyundai was an unknown entity when it announced its India intent in the 1990s whereas Ford and GM were global heavyweights. Yet, it succeeded and has not once shown any signs of complacency.
Today, Kia is also part of the Indian motoring landscape and in a short time span has already grown from strength to strength with two successful SUVs in the form of the Seltos and Sonet. The brand is part of the Hyundai Motor Group and the joint Korean powerhouse is literally on a roll.
Sure, Suzuki continues to be the market leader and is now in a partnership with Toyota for India but that will not deter the Hyundai-Kia combine from firing on all cylinders during the course of this decade. “If Hyundai and Kia can succeed, what has prevented GM and Ford from going the extra mile too?” asks an industry CEO.
Jacques Manlay, who was MD when Peugeot decided to shut its India operations in 1997 barely three years after it had set up shop, had this to say during a conversation with this writer in Paris nearly five years ago. “I remember being particularly impressed with Hyundai which had also entered the country in 1996. The company was focusing extensively on localisation since this was imperative for a cost-effective operation to be in place.”
In contrast, Peugeot (like other automakers from the West) was still heavily reliant on imported kits which would then be assembled at its Kalyan plant. According to Manlay, this comparatively casual attitude had to do with the fact that the company, like other global automakers, was doing well in its home market.
India was a different kettle of fish and there was really no compelling reason to step on the gas. Simply put, this meant that companies like Peugeot did not see why it was important to have a India-specific strategy when things were pretty much on course back home in Europe.
This was in sharp contrast to Hyundai and Suzuki which were smaller global players then compared to these giants. Hyundai has, of course, spread its global footprint since then and is no longer the unknown Korean brand it was way back in the mid-1990s. Along with Kia, it has a sound strategy in place for the future which includes electrification, fuel cells etc.
Till the Lehman crisis happened, Ford and GM were coasting along nicely along with Chrysler which had also freed itself from the difficult marriage with Daimler. When the 2008-09 global shock occurred, Detroit was virtually paralysed and needed help from the US government.
Fiat snapped up Chrysler and made a remarkable comeback as FCA (Fiat Chrysler Automobiles) thanks largely to the Jeep brand. GM needed a lifeline from its Chinese partner, SAIC Motor Corp, and has over the years cut back on its presence in a host of markets including India, South Africa and the ASEAN region. It will now focus solely on the US, China and Latin America.
Ford was better off and when it mortgaged its assets to borrow over $23 billion from banks in end-2006, there was consternation all around. “I had CEOs telling me what the hell I was doing. They said I would not be able to pay it back as the economy was slowing down and fuel prices were going up,” Alan Mulally, the then President and CEO of Ford, told this writer during a visit to India in 2013.
The thinking then was that this money was required to accelerate Ford’s restructuring process and get back to profitability. It was also meant for investments in new products. Eventually, it turned out to be a masterstroke especially when the two other icons of Detroit — GM and Chrysler — caved in and had to be bailed out by the US Government.
Figo-ring out the India market Ford was in big trouble in North America and Europe at that point in time and the top priority was to get back on track in these regions, while pumping investments into Asia- Pacific. The launch of the Figo in India was part of this “fundamental strategy” to serve markets around the world.
“We are sitting here now with arguably the finest complete line- up around the world of any automobile company because we invested for the long- term,” Mulally said during the interview. The world was not in great shape then but he reiterated that economic cycles were inevitable in business. “Our absolute focus is to create a long- term sustainable growing company,” he said.
Even while the company has now decided to slam the brakes on India, Mulally was of the view during the interview that it was thinking many years ahead simply because the global economy was going to expand which made it even more imperative to continue investing for the long- term.
“Product, production and people are all for the long- term because we believe in growth worldwide,” he said. This was the core of the One Ford strategy where the goal was to optimise the company’s assets across the world and deliver top-class value to customers.
The common global thread, though, was that all buyers would see the very best value. “They want the best in quality, fuel efficiency, safety and design because they are making a lifestyle choice. It is no longer about bigger being better or small being cheap and cheerful. They want the best in class for every (sized) vehicle,” Mulally added.
Going by his observations during this interview, the idea of retaining the Sanand plant for engine exports as well as the R&D team in Chennai is keeping in line with Ford’s intent to supply services from strategic locations worldwide. While it is a tribute to India’s competencies in engineering and R&D, this is of little comfort when a company has shut down the lion’s share of its business. Using the country for its backend operations alone will hardly make up for the thousands of jobs lost in the two facilities.
Mulally was the best thing that happened to Ford but this interview took place much before Covid-19 became a horrible reality for the world and had companies on the mat. Further, emission legislations following the Volkswagen diesel scam of 2015 have pushed the case for clean options like electrification which involve substantial investments and pooling in strengths to stay afloat.
This is precisely why Suzuki has joined hands with Toyota and Groupe PSA wasted little time in pushing for a merger with FCA to create Stellantis. Skoda is leading the India resurgence story for the Volkswagen Group while Renault and Nissan have been around as manufacturing allies in India for over a decade.
The global automobile arena is seeing new dynamics which also explains why Japan Inc is in consolidation mode with a giant like Toyota joining hands with Mazda for North America, Suzuki for India and other emerging markets like Latin America and Africa, and Daihatsu for ASEAN.
Ford will strengthen its bonding with VW for electrification in Europe and North America while the CEO of Stellantis, Carlos Tavares, has already outlined the road ahead. During his tenure, the once beleaguered Peugeot has bounced back to acquire Opel and Vauxhall from GM while moving quickly with the FCA merger.
“Detroit was the epicentre of the automobile industry till not-so-long ago. The world has changed with new challenges ahead and big brands of yesteryear will have to understand this reality. And whether you like it or not, China will matter by virtue of its size and the strides it has taken in electrification,” says a top CEO.
Will there be takers for Ford’s plants in Chennai and Sanand? The irony is that it is only the Chinese who are keen on investing in India now except that political realities will not allow this to happen. Given a chance, the likes of Changan, Great Wall and SAIC would queue up for a distress sale except that they have not got the green signal yet. And this is not likely to happen in a hurry either given the current hostilities along the border.
FORD CALLS TIME ON INDIA 1995 : Ford enters India in partnership with Mahindra & Mahindra. 1996 : Chennai plant commences manufacturing operations. 1998: Ford-Mahindra partnership ends. 2015: Sets up plant in Sanand for both vehicle and engine manufacture. 2017 : September 18 – Mahindra and Ford ink plan to explore a strategic alliance designed to leverage the benefits of Ford’s global reach and expertise and Mahindra’s scale in India and successful operating model.
2019: Ford partners M&M again in a strategic collaboration with a focus on product development for India and emerging markets. New mid-size SUV to be built on a Mahindra product platform and powertrain.
2020: On December 31, Ford-Mahindra partnership called off once again.
2021 : On September 9, World EV Day, Ford announces immediate halt to manufacturing and sale of new vehicles in India. Will continue making engines at Sanand plant for export and also maintain its R&D operations.
RELATED ARTICLES
Car and two-wheeler OEMs recall 5.67 million vehicles in India since 2012
Since the implementation of the Society of Indian Automobile Manufacturers (SIAM) Code of Voluntary Recall in July 2012,...
Nearly one in five cars sold worldwide in 2023 was electric
At nearly 14 million units, electric car sales in 2023 were 3.5 million and 35% higher than in 2022, taking their total ...
Maruti Suzuki’s SUV and MPV production jumps 100% to 58,226 units in January 2024
Utility vehicle market leader’s two plants in Haryana along with Suzuki Motor Gujarat’s facility hit a record monthly hi...
- How Mahindra sealed the BSA deal in 48 hours
- Skoda Auto India Joins Government e-Marketplace, offers Kushaq and Slavia
- BMW Motorrad introduces new colour option for G310 RR
- Euler Motors unveils Rs 100 crore manufacturing plant in Palwal, Haryana.
- TeamLease Degree Apprenticeship aims to equip 2 million youth with apprenticeship training by 2028
CURRENT ISSUE
August 15, 2024
POLL OF THE MONTH
Would you invest in the upcoming Ola and Ather IPOs?
Total Votes : 63
Sign up for our newsletter.
Get all the latest updates from the automobile universe
How Ford used Retrenchment Strategy in India?
Back in 2009, when I purchased my first car, I only had a few brands to choose from. Within the next decade, what I just witnessed was a boom in the automobile industry and other parallel industries.
But this is not an article on the growth and rapid global expansion of the automotive industry (So I will not bore you for sure :). Rather we will talk about the flip side of the coin.
How do companies deal with situations when they found themselves in the “low margin, low growth” category market for a product. Let us take an example of a company and expand the case.
I am talking about the mighty Ford Motors case study from India
Ford was started at Dearborn, Michigan , a suburb of Detroit in 1903 with 12 investors and 1,000 shares. Over the century Ford became global and was open to everyone. As a matter of fact, at the time, Ford’s initial public offering (IPO) of common stock shares was the largest IPO in history.
With its rapid expansion, Ford also entered India in October 1995 as Mahindra Ford India Limited (MFIL), a 50-50 joint venture with Mahindra & Mahindra Limited. By 1998, Ford increased its stake from 50% to 78% and renamed the company to Ford India Pvt. Ltd.
From there on it was unstoppable. It launched iconic cars like Ford Ikon (personal favorite to date) and Ford Escort. In 2011, Ford Figo even received the prestigious Indian Car of the Year Award . Till now it looks like a perfect journey for an international company in India. But the journey was not that simple as it looks.
In August 2019, the company reported a 31% YoY decline in sales to 5517. To give an idea, industry leader Maruti Suzuki sells more than this in a day. With just a 3% Market Share and $2 billion in investments over its two decades of existence, Ford India eventually decided to exit the Indian Market in September 2019.
Hi Nikhil – Speculations aside, Ford has no intention to exit India and will continue bringing products that Indian customers want and value. ^AZ — Ford India (@FordIndia) September 25, 2019
It did not exit completely though. Ford India just ended its independent operations. It went on a Joint Venture with Mahindra. Ford India transferred its assets to Mahindra, giving the latter a 51% stake. Ford India still had a 49% stake and voting rights.
Read: How Facebook used “Beachhead Strategy” to become a giant?
That was Ford India’s Story. But in general, a company exiting a market has to deal with many external forces and drivers. It is very complex to decide which market and which product/service to forgo and how.
But one solution to this is the Retrenchment strategy . The strategy aims to make the organization financially stable and future-oriented. Especially in tough times due to Covid-19, Retrenchment strategy is used by many companies.
Lets first understand what it is!!
What is the meaning of Retrenchment Strategy?
In the early 20th century, many military battles, such as those in World War I, were fought in a series of parallel trenches. The strategy says to focus on strength and concentrate on holding a small trench. This small retreat was preferable to losing the battle entirely. Trench warfare inspired the business term retrenchment.
This strategy slowly become popular and is now used in corporate and startups.
Retrenchment strategy in laymen’s terms is an abandonment of a non-performing market or a non-performing product that is no longer profitable to the organization. Retrenchment is often accomplished by laying off employees or closing certain branches. In general, the retrenchment strategy is about the strategic contraction of a business or a part of the business to enhance the overall business performance.
A retrenchment strategy is used when an organization seeks to reverse a decline in performance. The main focus of such a strategy is to increase operating efficiencies and improve cash flow Arthur G. Bedeian
What are the types of Retrenchment Strategies?
There are primarily three types of retrenchment strategies.
- Turnaround Strategies – This happens when a company is facing negative cash flows or low profitability or declining market share or worsening debt-equity ratio . In such cases, the focus is either on reducing costs and investments through downsizing or stricter control on expenditures or selling or assets. Or increasing profitability through better monetization opportunities like launching new products or revamping the brand or reducing prices to increase sales.
- Divestment strategies – Divestment is simply the process of selling subsidiary assets, investments, or divisions of a company. The strategy is adopted when a part of a business or division was acquired but did not turn out to be profitable or the division needs heavy investments in some form but a company is better off without it. In such cases, the organization either sells the division or separates the division ( spin-off ) by making it an independent entity that is responsible for its own profitability.
- Liquidation strategies – Liquidation a last resort that any company would like to adopt. The company implements this strategy when it is no longer in a position to pay to its creditors or shareholders due to cash shortage or lack of market requirement for its products. In summary, it’s about selling the business and its assets when it is no longer attractive to run the business.
Ford India, Other Organizations and the Retrenchment strategy
Ford is one of the top 5 automobile manufacturers in the world in terms of Volumes. No one would have ever thought that one-day Ford would use Retrenchment Strategy in one of the key markets- India. I must emphasize here that India is currently the 4th largest market in the world and is expected to be the world’s third-largest automotive market in terms of volume by 2026.
Read: Will Digital Growth help India Unlock Trillion Dollar Opportunity?
As market dynamics change, each company needs to adapt to economic cycles.
In the year 2019, Ford made an announcement. The Ford motor decided to retrench from India and transfer operations to Mahindra & Mahindra along with its assets. It’s not exactly a liquidation strategy as it still holds 49% of the business along with voting rights.
So Ford motor remains in a country that has a very high growth potential without having to shoulder the full cost burden of developing new models. The strategy helped Ford in generating some cash flow to find its growth avenues elsewhere.
The Retrenchment strategy is used by organizations all around the world especially by startups. A great example is how P&G the world’s largest consumer products maker focused to improve revenue and profit. Using the Retrenchment strategy P&G dropped almost 100 of its product categories and focused on the key product to maximize long-term value and create exciting opportunities within the businesses.
Now let talk about the fast-food sector which has used the Retrenchment as a key strategy. The McDonald’s and KFC’s combined foreign sales rose 400% in the last decade mostly due to sales in China. But in the years 2012 to 2017, the companies have since retrenched or sold their Chinese operations to simply its sprawling business through the franchise model
What are the Challenges of Retrenchment Strategy?
The retrenchment strategy has its challenges especially when the market a company is retrenching from is a lucrative and growing market. The organization is losing out on an opportunity to be part of such a market.
Retrenchment from a market might give the global brand name bad press and can affect the global business. Companies might also receive bad publicity due to the firing of people or mass layoffs as part of its retrenchment strategy.
As they say, every coin has two sides. Retrenchment strategy can act as a boon but if wrongly implemented can act as a bane. But then that’s a story for another time!!
Interested in reading our Advanced Strategy Stories . Check out our collection.
Also check out our most loved stories below
IKEA- The new master of Glocalization in India?
IKEA is a global giant. But for India the brand modified its business strategies. The adaptation strategy by a global brand is called Glocalization
Why do some companies succeed consistently while others fail?
What is Adjacency Expansion strategy? How Nike has used it over the decades to outperform its competition and venture into segments other than shoes?
Nike doesn’t sell shoes. It sells an idea!!
Nike has built one of the most powerful brands in the world through its benefit based marketing strategy. What is this strategy and how Nike has used it?
Domino’s is not a pizza delivery company. What is it then?
How one step towards digital transformation completely changed the brand perception of Domino’s from a pizza delivery company to a technology company?
Why does Tesla’s Zero Dollar Budget Marketing work?
Touted as the most valuable car company in the world, Tesla firmly sticks to its zero dollar marketing. Then what is Tesla’s marketing strategy?
Microsoft – How to Be Cool by Making Others Cool
Microsoft CEO Satya Nadella said, “You join here, not to be cool, but to make others cool.” We decode the strategy powered by this statement.
Abhiyash is a technology enthusiast with 6 years of experience working in different business domains and functions. A firm believer of kaizen principle.I love travelling, hiking and meeting new people.
Related Posts
AI is Shattering the Chains of Traditional Procurement
Revolutionizing Supply Chain Planning with AI: The Future Unleashed
Is AI the death knell for traditional supply chain management?
Merchant-focused Business & Growth Strategy of Shopify
Business, Growth & Acquisition Strategy of Salesforce
Hybrid Business Strategy of IBM
Strategy Ingredients that make Natural Ice Cream a King
Investing in Consumer Staples: Profiting from Caution
Storytelling: The best strategy for brands
How Acquisitions Drive the Business Strategy of New York Times
Rely on Annual Planning at Your Peril
How does Vinted make money by selling Pre-Owned clothes?
N26 Business Model: Changing banking for the better
Sprinklr Business Model: Managing Unified Customer Experience
How does OpenTable make money | Business model
How does Paytm make money | Business Model
Write a comment cancel reply.
Save my name, email, and website in this browser for the next time I comment.
- Advanced Strategies
- Brand Marketing
- Digital Marketing
- Luxury Business
- Startup Strategies
- 1 Minute Strategy Stories
- Business Or Revenue Model
- Forward Thinking Strategies
- Infographics
- Publish & Promote Your Article
- Write Article
- Testimonials
- TSS Programs
- Fight Against Covid
- Privacy Policy
- Terms and condition
- Refund/Cancellation Policy
- Master Sessions
- Live Courses
- Playbook & Guides
Type above and press Enter to search. Press Esc to cancel.
- WEB STORIES
What can we learn from Ford’s exit?
Consumers are the biggest losers with ford india’s ‘restructuring’ exit; then it is dealerships, their staff..
By Vinkesh Gulati
On September 9, 2021, Ford India announced it is ‘restructuring’ its domestic operations. This means discontinuation of all models it used to sell, closing manufacturing plants in Gujarat and Tamil Nadu, and for all practical purposes a clear exit from the Indian automobile market. There have been enough debates on what this means for the industry , and the hardships it will create for dealerships in terms of loss of jobs , livelihood and economic security. But it is equally important to discuss the repercussions on one of the most important stakeholders in this chain, the Indian consumer.
This announcement came a day before Ganesh Chaturthi (which marks the beginning of the festive season, a period considered auspicious for buying cars, gold, property etc). But for Ford dealers and buyers, this Ganesh Chaturthi was anything but auspicious. Dealers were left to deal with angry and confused customers who were cancelling bookings, asking for refunds and refusing to take delivery. Most vehicle purchases happen through financing, and consumers look at price, brand, fuel efficiency, after-sales support and resale value before buying a car . From the distress that followed Ford’s announcement, it is clear that most consumers would not have decided to buy a Ford car if they knew the company was shutting shop, but are now stuck with a product whose future is uncertain, and which has been bought at a major financial cost.
The concerns of Ford consumers stem from the past experience of similar exits by other automakers from India. In spite of assurances by General Motors, post their exit in 2017, the availability of GM spare parts and its service centre network have dried completely. Consumers pay road tax on vehicles for 15 years, so it is fair to expect service support and availability of spare parts for at least that duration. The lack of after-sales support has a negative effect on a consumer’s car-owning experience and may encourage the fake auto parts industry, having direct consequences for road safety. Such exits also have a knock-on economic effect since the resale value of cars plummet sharply after a manufacturer’s exit.
Ford’s exit can also lead to a situation where a consumer may not have a clear legal recourse in case there are issues related to product liability or warranty. Unfortunately, in such cases, consumers often tend to take legal action against dealers, the only face of the brand left on the street. In one case, a dealer of United Motorcycles had to deal with a consumer complaint that arose out of manufacturing defects, which should clearly be under the manufacturer’s ambit. In Ford’s case too, the manufacturer’s exit may lead to onerous legal burden on the dealer, while also leaving the consumer with no certain solution.
In fact, Ford’s exit leaves everyone in a bad position—around 170 dealers with 391 outlets are staring at a loss upwards of Rs 2,000 crore in sunk investment costs. Around 40,000 employees working at these dealerships are facing loss of livelihood and over 10 lakh Ford customers in India have a product whose future performance and value is uncertain. Ford was setting up new dealerships in India till at least a few months before this announcement, and dealers who had been kept in the dark were taking bookings till a day before the exit was announced. While companies should be able to exit the market based on economic considerations, it is also important that all affected stakeholders have their interests safeguarded.
We do not currently have provisions that protect the interests of dealers and consumers in the same manner. The enactment of an automobile dealer’s protection Act can be helpful in this regard. It can ensure there is clear and defined responsibility in the case of product liability and warranty infringement, creating a pathway for the consumer in terms of legal recourse. Most consumers will never directly interact with OEMs, and their ownership experience will largely depend on their interaction with dealers. Hence, an Act that guarantees the obligations of OEMs towards dealers will provide a degree of assurance to the consumer as well. The creation of a clear, structured, delineated framework can help alleviate the anxiety and uncertainty related to an exit, while ensuring that the exit leads to minimal disruption in the market.
The author is President, Federation of Automobile Dealers Associations of India. Views are personal.
Get live Share Market updates, Stock Market Quotes , and the latest India News … Read More and business news on Financial Express. Download the Financial Express App for the latest finance news.
- Mutual Funds
- IPO’s Open and Upcoming 7
- Top Indices Performance
- Stock Analysis
- Stock Market Stats
- Financial Literacy
- Gold Rate Today
- NSE Top Gainers 897
- NSE Top Losers 1743
- BSE Top Gainers 1755
- BSE Top Losers 2490
- NSE 52-Week High 0
- NSE 52-Week Low 0
- BSE 52-Week High 0
- BSE 52-Week Low 0
- NSE Price Shocker
- NSE Volume Shocker
- BSE Price Shocker
- BSE Volume Shocker
- NSE Sellers
- BSE Sellers
- Silver Rate Today
- Petrol Rate Today
- Diesel Rate Today
- Take One: Big story of the day
Ford might just make a return to India. Is it worth the fight?
After leaving the shores some two years ago, speculation is rife that the American automotive giant wants to sell in India and export out of here. By holding on to its Chennai plant, it wants to focus on the electrification and digital transformation of core segments in which it is a leader—trucks, SUVs and commercial vehicles
- Most Popular
Manu Balachandran is a writer for Forbes India, based in Bengaluru. At Forbes India, Manu writes on automobiles, aviation, pharmaceuticals, banking, infrastructure, economy and long profiles among many others. He also moderates many of Forbes India's CEO and CXO events and hosts Capital Ideas, a podcast on the most riveting success stories from the business world. He has previously worked with Quartz, The Economic Times and Business Standard in Mumbai and New Delhi. Manu has a master's degree in journalism from Cardiff University and a degree in economics from the Loyola College. When not chasing stories, he is most likely obsessing over Formula 1 (Read: Lewis Hamilton), historical events and people, or planning long weekend drives from Bengaluru
- Popees: The baby care brand from Kerala taking on global rivals
- Counterstrike: How IndiGo is taking the fight to Air India even before the latter's turnaround
- How MP Ahammed built Malabar Gold & Diamonds: Small shop in Kerala to Rs 51,000 crore behemoth
- Budget 2024: Not a lot for auto and aviation, but highways will grow, especially in Bihar
- Budget 2024: Can Rs 15,000 crore for Amaravati revive Andhra Pradesh's capital dreams?
- How the Adani Group became India's largest airport operator
- China drives into India
- Bharat Aluminum Company puts safety first
- India's Richest: Meet the ice cream billionaire
- How the Marx-loving fluke entrepreneur became India's coffee king
Related stories
MG Motor has had a decent run in India so far. Can Sajjan Jindal take it to the next level?
After Tesla, India will soon have another global electric car maker. What's VinFast planning?
Skoda Auto's next big India push
What lies ahead.
- " class="general-icons icon-sq-googleplus popup">
- " class="general-icons icon-sq-youtube">
An eye above the spectacle: Photography at the Olympics 2024
Photo of the day: Raksha Bandhan 2024
Argentine lithium a boon for some, doom for others
Greeks try tropical crops in climate change experiment
Bajaj Electricals: Sailing the winds of change
The CMO Survey: Marketers spend on new technologies as they battle usage and impact challenges
Photo of the day: Calm before the storm
Photo of the day: Consequences
Climate change fuelled deadly Kerala landslides, say scientists
From Parth Jindal's Olympics efforts to a new chapter of IndiGo vs Air India, our top stories of the week
Students want more environmental health taught in medical schools
DBS Bank India launches 'India-Singapore Connect' In 30th year in India,in association With CNBC-TV18
L&T Semiconductor has a pipeline of 20 automotive clients so far: CEO Sandeep Kumar
AI may reproduce gender, ethnicity biases in mental health tools
Photo of the day: Speak now
- Kolkata Rape
- Paper Heist
- Uncovering Hate
- Manipur Conflict
- Climate Change
- Members Only
- Brand Studio
- Entertainment
- The Quint Lab
- Graphic Novels
- Members' Opinion
- South Asians
- Privacy Policy
BECOME A MEMBER
Ford’s india exit: what forced the us carmaker’s u-turn from the indian roads, consumers, now less price-sensitive, are choosing safer premium cars. the market evolved but ford chose not to adapt.
The first time Ford exited the Indian market was back in 1953. They had cited the high production cost due to extreme import restrictions as their reason for leaving India. After almost half a century, they have again departed from the fourth-largest auto market.
The automobile giant announced their departure from the Indian market in September last year. Ford, almost did take a U-turn in February this year when they secured a Production Linked Incentive (PLI) benefit for electric car manufacturing offered by the Indian Government. However, the plan did not materialise.
Tata Motors, the same company whom Ford once tried to school back in 1999, has recently acquired the latter's Gujarat Plant. In an infamous incident, founder Bill Ford had once lectured Ratan Tata on passenger car division management.
However, the tables seem to have turned though not for the first time. Tatas also rescued Ford from bankruptcy in 2008 when they acquired Jaguar and Land Rover in an all-cash deal.
Ford's India Run
During Ford’s second innings in the Indian market, they first entered as Mahindra Ford India Limited, a 50-50 joint venture, but soon became a majority holder (72%) in 1998 and renamed themselves as 'Ford India Private Limited.'
By 2003, they launched iconic models like Escort, Ikon, and Endeavour. However, post their initial success, only EcoSport had a decent market reception. They had successful models like Bronco, Explorer, Escape, and a whole line of vans offered in the USA, but these models were never fully explored for the Indian Market. So, what did happen to the auto pioneers of the world?
Price Hike, Taxation, Design Remain Major Contentions
Reflecting on one of their misses, if we take the case of Figo launched in 2010 which even though did see some positive response, could not create or sustain what Escort or Ikon generated for Ford.
The key issues are design and pricing. An automatic petrol Figo costs approximately 1.5 lakhs more than the Figo manual, whereas, for other brands, the difference between manual and automatic variants is less than a lakh. It is also more expensive than most automatic cars in the same segment. Therefore, it is imperative to understand that one of the contributors to this price difference is engine size.
The tax on automobiles in India depends on engine size and vehicle length. Considering that the automatic version of Figo had a 1.5 L engine, where the tax slab jumps at 1.2 L, Figo became costlier than similar automatic cars in the same segment (the manual version has a 1.2 L engine).
1.5 L engine size does not even contribute much to a small car. On the other hand, the Ford cars in India did not carry essential safety features like ‘Isofix’ (child car seat fixers), which are standard features in other cars in the same price range and even in some cars at a lower price point.
India’s Auto-Market Fertile for Foreign Players
The Indian car market is currently a playing field for numerous non-native players, where the Indian players only hold about 20 percent of the market share. Suzuki and Hyundai together occupy more than 50 percent of the market. Kia, which has only been in the market recently, has already gained 5.71 percent of the market, almost three times Ford’s 25 years of market share.
Can Ford Afford To Not Cope Up With Growing Demands?
On value proposition, Suzuki in India offers fuel-efficient, low maintenance, and economically-priced cars, Tata, with their New Car Assessment Program(NCAP) crash testing ratings, offers safe vehicles, Volkswagen offers premium cars, and the new entrants Kia and MG Hector are offering cars with the latest technology (360 camera, internet inside, etc.)
Hence to Indian consumers, Tata is a safe car, Maruti Suzuki is one of their own & affordable as the brand is synonymous with a car for countless Indians, Volkswagen is a fun-to-drive car, and Kias and MGs are high on features. But Indian consumers never really had a solid perception of a Ford car.
Since auto companies from other countries penetrated and successfully positioned themselves in the Indian auto market, the market cannot be blamed for the failure of companies like Ford or General Motors. India is an attractive market with the Government actively trying to make ‘doing businesses’ easy.
Consumers have become less price-sensitive and are loosening their purse strings for safer and premium cars. The market evolved, but Ford chose not to adapt. They did not upgrade their models with newer features that the market demanded, did not bring in newer versions, and did not reflect enough on the pricing.
Will Ford Make a Comeback?
Ironically, Ford Ecosport, which started the subcompact SUV trend in India, helped its rivals Tata motors to establish itself in the market with its highly successful model – Tata Nexon.
Ford’s inability to scale and sustain itself in a growing market reinforces the importance of fundamental marketing concepts like segmentation, targeting, and positioning. Ford, neither has a precise image nor a clear target segment of consumers. Hopefully, the lessons learned from the Indian market will help Ford in the future, and they will be mindful of them in their third innings (if any) on the Indian roads.
(The authors are associated with the Indian School of Business(ISB). This is an opinion piece and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)
( At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a membe r . Because the truth is worth it. )
Read Latest News and Breaking News at The Quint, browse for more from opinion
Topics: automobile tata motors market collapse .
Loading Comments...
- Hot Threads
- Spare Parts
- Buy Accessories
- Classifieds
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IMAGES
COMMENTS
Rise & fall of Ford India: A comprehensive study! 17th October 2021, 15:00 by Rahul Nagaraj . ... in this case, it seems it was Ford's India operation, and in general, multiple times bankrupt SsangYong from Korea. 2021 - Ford's Indian market exit strategy. To say goodbye is pretty easy and simple on paper. And Ford did it in
Ford India's Sanand plant has a manufacturing capacity of 240,000 vehicles and 610,000 engines per annum. ... With Ford, it was a classic case of spending where it didn't benefit the customer ...
In April 2021, the giant US automaker Ford Motor Company was facing a decision regarding its Indian operations, which were struggling. It had brought in a new global chief executive officer-its fourth in the past decade-who was tasked with making this choice. The company could remain invested in India, either operating on its own or in a joint venture. It could also decide to manufacture for ...
As the brand claims, its accumulated operating losses over the 10 years was more than $2 billion. Besides this, a $0.8 billion non-operating write-down of assets in 2019 too resulted in its decision to shut down the two Indian plants. Maruti Suzuki has a good opportunity to grab the vacuum to be created by Ford's exit.
General Motors' exit in 2019 was driven by a decision to get out of non-profitable operations in a few regions including India, Russia and Western Europe. Harley Davidson left India as part of its 'Rewire' strategy to focus on select markets such as North America, Europe and some parts of Asia. The company had a loss of $96 million during ...
Ford India later added models like Figo, Fusion, Aspire, EcoSport, Endeavour and Freestyle. In FY2000, Ford sold 8,000 PVs in India, which grew to 93,000 units in FY2019.
India's passenger car market is predictably huge—and worth around $30 billion—but it's a tough nut to crack. US auto giant Ford is the latest major company to run into difficulties. On ...
More than 500 employees at the Sanand Engine plant, which produces engines for export for the best-selling Ranger pickup truck, and about 100 employees supporting parts distribution and customer service, also will continue to support Ford's business in India. Ford will begin importing and selling must-have, iconic vehicles, including Mustang ...
Abstract. Ford India operations ended up losing roughly two billion dollars due to lack of demand and sales. The pandemic has placed the company on the back foot, unprecedented failures and ...
Abstract Case Intro 1 Case Intro 2 Excerpts Introduction. In October 2021, Ford Motor Company (Ford), the second largest automaker in the US, announced that it was infusing Rs. 50 billion into its Indian unit - Ford India Private Limited (Ford India) - to enable it to make unpaid payments to dealers and distributors and offer a separation package to employees.
In FY2021, Ford India produced only 88,805 units - that's barely 20 percent - and sold 48,042 in the domestic market. With Ford India unable to come to grips in terms of steering its future ...
I am talking about the mighty Ford Motors case study from India. Ford was started at Dearborn, Michigan, a suburb of Detroit in 1903 with 12 investors and 1,000 shares. Over the century Ford became global and was open to everyone. As a matter of fact, at the time, Ford's initial public offering (IPO) of common stock shares was the largest IPO ...
Welcome to our latest business case study where we explore the fascinating and intricate tale of Ford Motor Company's exit from the Indian market. This video...
In Ford's case too, the manufacturer's exit may lead to onerous legal burden on the dealer, while also leaving the consumer with no certain solution. In fact, Ford's exit leaves everyone in ...
Ford began operations in India with the Ford Escort, a sedan. The company started out with a 1,600 cc petrol-powered engine, which went on sale in October 1996.
Last year, Ford exited the Indian market; General Motors left the Indian market in 2017. American carmakers keep failing in India, but why do they fail? Both G.M and Ford, at one time, had great…
1995 - JV route. Ford has started its Indian journey by signing a 50-50 joint-venture (JV) partnership with Mahindra (Mahindra Ford India Ltd) in the mid 90s. Then Ford was the second largest automotive company in the world. Modified European Escort, launched in late 1996, was the first offering of JV in India.
During Ford's second innings in the Indian market, they first entered as Mahindra Ford India Limited, a 50-50 joint venture, but soon became a majority holder (72%) in 1998 and renamed ...
Posts: 513. Thanked: 1,794 Times. re: The rise and fall of Ford India | The most comprehensive study. An extremely comprehensive analysis- i must say. The only things that i would like to add are-. 1. The frequent feature changes, often multiple times in one year on hot selling models like the Ecosport. 2.
Ford's hastily organised townhall by Indian management reflected the woes of the US automaker's journey in India. It has been struggling amid weak domestic volumes, falling exports, and a lack of new products for the domestic market. It seems to be following the lines of General Motors, which exited India in 2017.
Maruti Suzuki Case Study - History and Success in India. Maruti is a car brand for some but an emotion for many. It has been catering to Indians since 1980. ... As mentioned by Anurag Mehrotra, president of Ford India, car owners will still have access to spare parts and services through local dealers and customer support if it's needed for any ...